David Cameron is to announce a government childcare commission that will look at lengthening the school day and allowing childcare workers to look after more children at any one time, in an attempt to cut costs for parents.

Downing Street regards spiralling childcare costs as one of the most pressing issues facing families under pressure over living standards. The commission will be led by Sarah Teather, the children's minister, and Maria Miller, currently minister for disabled people and tipped to join the cabinet as families secretary.

Downing Street said the commission would explore the effectiveness of government support, identify unnecessary red tape that increases costs without improving quality, and look at how to encourage childcare after school and in the holidays – so-called wrap-around care. At present such wrap-around care is not commercially viable in many schools.

It will also look at international examples including the Netherlands, which requires childminders to be part of an agency that is subject to inspections, rather than the system of checks on individual childminders in the UK.

The issue has been promoted by the Conservative backbencher Liz Truss, who has argued that the required ratio of one adult to every three children could be raised to 1:5 for children aged under five, without the quality of care being adversely affected. A change in the ratios might only apply in areas where there are no after-school clubs.

In a report in May, Truss claimed that while the number of nursery places had increased since 1996 the number of childminder places had dropped drastically, to 245,000 in 2010.

The shadow education secretary, Stephen Twigg, has been a supporter of a longer school day, although it would require complex negotiations with teaching unions.

Cameron said: "Working parents want to know that after school or in the holidays their children will be looked after in a safe, happy environment that is affordable. We want to do all we can to reduce the cost of childcare for parents, and make sure they can find and afford high-quality nurseries, after-school clubs and holiday schemes for their children."

The prime minister believes that funding streams are too complex. Department for Education research shows that four out of 10 parents believe there is sufficient childcare in their areas for over-fives, but the UK has the highest per capita spending on childcare. There is no suggestion that additional tax breaks will be made available.

Later in the week the government will publish DfE-commissioned research into the quality and staffing for early years services. The government has significantly increased investment in early education, but funding streams are complex. The commission will look at whether some of this could be untangled so that it is spent more effectively.